CURRENT MONTH (June 2019)

Business Litigation

New York State Expands Prohibitions on Mandatory Arbitration in the Context of Workplace Harassment

By Leslie A. Berkoff, Moritt Hock & Hamroff LLP

On the last day of its legislative session, June 19, 2019, the New York State Senate and Assembly passed sweeping reforms meant to overhaul the state’s antidiscrimination laws. (S6577/A8421). The legislation is an omnibus bill that amends different provisions of the New York State Human Rights Law (NYSHRL), the General Obligations Law, the Civil Practice Law and Rules, and the New York Labor Law. Together, these amendments provide for significant changes to New York’s already expansive workplace harassment laws. While the amendments were passed against the backdrop of the Legislature's focus on sexual harassment in the workplace, the amended laws will apply to all forms of workplace harassment cases. Governor Cuomo is expected to sign the amendments shortly.

The broad legislation enacts sweeping changes to sexual harassment laws previously passed. Among other things, it would lower the burden on plaintiffs seeking to prove claims of workplace harassment under the NYSHRL, extend the statute of limitations for bringing such claims, and expand potential damages for violations. Moreover, it explicitly further expands existing legislation impacting the use or commitment to arbitration to resolve related disputes.

Specifically, the legislation further expands the recently enacted prohibition on arbitration of sexual harassment claims. The 2018 expansion of New York’s sexual harassment laws (General Obligations Law) already prohibited the inclusion of non-disclosure clauses in settlement of sexual harassment claims, unless the alleged victim explicitly wanted the clause. The current bill further expands this prohibition to now prohibit employers from requiring employees, as a condition of employment, to agree to arbitrate those claims on the basis of any protected class, not just sexual harassment.

It is important to recognize that as with the existing laws, these expanded prohibitions only apply to the extent that they are not otherwise inconsistent with federal law. Thus, it is likely they would be preempted by the Federal Arbitration Act in cases where both state and federal law might otherwise apply.